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Bridge Loans in Scottsdale: How to Unlock Home Equity to Buy Before You Sell
HomeLight
Real Estate
13 hrs ago
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Selling your current home while trying to buy a new one in Scottsdale can feel like a juggling act. You need the equity from your existing home to fund your next purchase — but getting the timing right isn’t always easy.

It might seem like your only option is to sell, move out, and temporarily rent while you search for your next home.

A bridge loan could be the solution to help everything fall into place. In this post, we’ll explain everything you need to know about bridge loans in Scottsdale so you can decide the best path forward for your situation.

Yes, You Can Buy Before You Sell. Why Move Twice?

Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.

Buy Before You Sell

What is a bridge loan, in simple words?

A bridge loan is a short-term loan designed to help you buy a new home before your current one sells. It lets you tap into your existing home’s equity to cover a down payment and closing costs, giving you more flexibility in a tight timeframe.

Bridge loans are typically more expensive than traditional mortgages, but they offer convenience and speed — especially when you need to act fast and don’t want to risk losing your next home.

Also referred to as:

  • bridge financing
  • bridging loan
  • interim financing
  • gap financing
  • swing loans

How does a bridge loan work in Scottsdale?

If you’re researching bridge loans in Scottsdale, you may have found your next home but are still in the process of selling your current one. Rather than miss out, you can use your home’s equity to fund the down payment and closing costs for your new property.

Often, the same lender issuing your new mortgage can also provide your bridge loan. They may require your current home to be listed on the market and typically cap the loan term at six months to one year.

Your debt-to-income ratio (DTI) will also factor into approval. Lenders may include your current mortgage, your new mortgage, and interest-only payments on the bridge loan in the calculation.

However, if your current home is already under contract and the buyer’s loan has final approval, your lender may only count the new mortgage payment. Lenders want to see that you can handle both payments if your current home takes longer to sell.

What are the benefits of a bridge loan in Scottsdale?

Here are a few ways bridge loans in Scottsdale can help make your transition smoother:

  • You can make a non-contingent offer on your new home: Sellers often prefer buyers without home sale contingencies.
  • You only have to move once: Forget about temporary housing or storage costs.
  • You can prepare your old home for sale: Vacate first, then focus on preparing your home with staging and repairs.
  • Lenders don’t always require payments during the loan period: You may not owe anything until your previous home sells.
  • You can move on the right property quickly: Make an offer without worrying about selling first.

What are the drawbacks of a bridge loan?

While a bridge loan can provide more flexibility and alleviate some stress when it comes to selling your current home and purchasing a new one, there are some notable drawbacks:

  • Additional loan costs: You may need to pay underwriting fees, origination fees, and other closing costs.
  • Added financial stress: You could end up covering two mortgages and a bridge loan simultaneously.
  • Qualifying may be more difficult: Lenders often have stricter requirements than they do for a traditional mortgage.
  • Underwriting can be a slower process: The review process can take longer than you might expect.

When is a bridge loan a good solution?

A bridge loan isn’t a one-size-fits-all solution, but for some sellers, it can ease the stress of transitioning between an old and a new home.

Some examples of when a bridge loan might help:

  • You need the equity from your current home for a new home’s down payment.
  • You can’t afford a double move and interim housing.
  • Your dream home just hit the market, and you want to take immediate action before another buyer beats you to it.
  • Your offer’s home sale contingency has been a deal-breaker for sellers.

You want to sell an empty or staged home, which can often be more lucrative.


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